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• Revenue - the amount of the goods or services a business sells to customers
• Gross profit- the difference between revenue and cost of goods sold.
• Balance Sheet- is a financial statement that lists what a business owns, what it owns and how much it is worth at a particular point in time. It illustrates your business’s net worth.
• Net Income- after the taxes are subtracted, the result is the loss for the period.
• Assets=Liabilities + Equity
• Assets - Items of value owned by business
• Liabilities- are amounts that a business owes to others
• Owner’s Equity- the amount remaining after the value of all liabilities is subtracted from the value of all assets.
• Current assets- referred to as liquid assets, can be converted to cash easily
• Accounts receivable- amounts owed to a business by its credit customers.
• Fixed assets- illiquid assets cannot be converted into cash easily, are those that will be used for many years.
• Long term liabilities -are debts that are payable over a year or longer
• Current liabilities- debts that are due to be paid in full in liability
• Accounts Payable- are amounts owed to vendors for a merchandise purchased or credit.
• Vertical Analysis evaluates financial statement accounts with each account expressed as percentage of the base account. The performance measurement determines proper balances for given accounts. For both service and merchandizing enterprises, the biggest percentages are for salaries and wages.
• Sole Proprietorship or Individual Proprietorship- simplest form of business. It is simply refers to a person who owns the business and is personally responsible for its debts.
• Partnership- a legal form of business between two or more individuals who share management and profit. The two most common type of partnership are general and limited partnership.
• General - the partners manage the company and assume responsibility for the partnership’s debts and other obligations.
• Limited - has both general and limited partners, the general partners own and operate the business and assume liability for the partnership, while the limited partners serve as investors only. They have no control over the company and are not subject to the same liabilities as the general partners.
• Corporation - has a separate legal status. It is able to raise large sums of capital through issuing bonds and stock. Income is taxed twice, once as profits, then as personal income or dividends.
• Horizontal Analysis - is the left to right comparison of performance for comparative periods. A minimum of three periods may be compared to evaluate increases and decreases. The increases or decreases are expressed as percentage of change.
• Cost of Goods sold - the cost of inventory a business sells during particular period is called cost of goods sold.  Only business that have inventory will have this item on their income statement.